Home
Life insurance or life assurance is a contract between the policy owner
and the insurer, where the insurer agrees to pay a designated
beneficiary a sum of money upon the occurrence of the insured
individual's or individuals' death or other event, such as terminal
illness or critical illness. In return, the policy owner agrees to pay a
stipulated amount called a premium at regular intervals or in lump
sums. There may be designs in some countries where bills and death
expenses plus catering for after funeral expenses should be included in
Policy Premium. In the United States, the predominant form simply
specifies a lump sum to be paid on the insured's demise.
As with most
insurance policies, life insurance is a contract between the insurer
and the policy owner whereby a benefit is paid to the designated
beneficiaries if an insured event occurs which is covered by the policy.
The
value for the policyholder is derived, not from an actual claim event,
rather it is the value derived from the 'peace of mind' experienced by
the policyholder, due to the negating of adverse financial consequences
caused by the death of the Life Assured.
To be a life policy the insured event must be based upon the lives of the people named in the policy.
Insured events that may be covered include:
policies are legal contracts and the terms of the contract describe the
limitations of the insured events. Specific exclusions are often
written into the contract to limit the liability of the insurer; for
example claims relating to suicide, fraud, war, riot and civil
commotion.
Life-based contracts tend to fall into two major categories:
and the insurer, where the insurer agrees to pay a designated
beneficiary a sum of money upon the occurrence of the insured
individual's or individuals' death or other event, such as terminal
illness or critical illness. In return, the policy owner agrees to pay a
stipulated amount called a premium at regular intervals or in lump
sums. There may be designs in some countries where bills and death
expenses plus catering for after funeral expenses should be included in
Policy Premium. In the United States, the predominant form simply
specifies a lump sum to be paid on the insured's demise.
As with most
insurance policies, life insurance is a contract between the insurer
and the policy owner whereby a benefit is paid to the designated
beneficiaries if an insured event occurs which is covered by the policy.
The
value for the policyholder is derived, not from an actual claim event,
rather it is the value derived from the 'peace of mind' experienced by
the policyholder, due to the negating of adverse financial consequences
caused by the death of the Life Assured.
To be a life policy the insured event must be based upon the lives of the people named in the policy.
Insured events that may be covered include:
- Serious illness
policies are legal contracts and the terms of the contract describe the
limitations of the insured events. Specific exclusions are often
written into the contract to limit the liability of the insurer; for
example claims relating to suicide, fraud, war, riot and civil
commotion.
Life-based contracts tend to fall into two major categories:
- Protection policies -
designed to provide a benefit in the event of specified event,
typically a lump sum payment. A common form of this design is term
insurance. - Investment policies - where the
main objective is to facilitate the growth of capital by regular or
single premiums. Common forms (in the US anyway) are whole life,
universal life and variable life policies.